Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: brokenst0nes who wrote (55100)	6/5/2013 5:02:53 PM
From: Sam	Respond to of 60323

They said that they haven't set a timetable for it yet. But OK, fine, I'll qualify my comment. They may build the second part of Fab 5. But it won't be in actual production until 2015. My guess is that the next set of fabs will be supplying SSDs as standard equipment to OEMs.

To: brokenst0nes who wrote (55100)	6/5/2013 11:36:35 PM
From: Sam	1 Recommendation Recommended By david1951 Respond to of 60323

What about Fab 5 Phase II, One more thing on this--Sandisk has always been conservative about building new capacity, waiting until they were pretty sure that the new supply would be soaked up by demand. I'm not saying that they have always been right about it, but nonetheless, that is their modus operandi. I don't believe that that will change. And yes, I do think that, finally, SSDs have made it into the big time, and the next 3 or 4 years will be very strong ones for NAND, assuming of course that the macro economic environment holds up, something that may or may not be a good assumption.

To: brokenst0nes who wrote (55100)	6/5/2013 11:56:15 PM
From: Sam	Read Replies (1) \| Respond to of 60323

OK, one last thing on Sandisk and capacity, this time from Sanjay at Analyst Day. My bolding--it sounds to me like they will be using production from Fab 5 Phase II not to add new wafer capacity but to take the older already installed capacity in Fabs 3 and 4 down in order for 1Z and BiCS. This will still add some capacity, but it will be leading edge capacity. "Prudent" was one of Eli's favorite words, and it is certainly one of Sanjay's as well. Now let me comment on capacity considerations. Our current capacity Fab 3, Fab 4 and Fab 5, combined, is about 2.5 million wafers per year. And we have discussed in our last earnings call that Phase 1 of Fab 5 will be utilized primarily for technology transitions of the installed capacity base to 1Y. We will not be adding new -- any new capacity in the fabs. We will not be investing in any new capacity in Fab 5 in 2013 timeframe. Our capacity gains will only be coming from productivity improvements in the fab. Our Fab 5 Phase 2 construction start decision has not yet been made. We expect construction to begin sometime in 2013 timeframe. It will take several quarters, and we'll be ready sometime in 2014 to roll in equipment and begin production in that fab. We expect that Phase 2 will be primarily used for transitioning our installed capacity of Fab 3, Fab 4 and Fab 5 to the future 1Y and the 1Z nodes, as well as for BiCS pilot line production capability. Pilot line production capability for BiCS for latter part of 2015, the space will be utilized for that. So in terms of our capacity strategy, you can see that we are very much focused on continuing to drive prudent capacity expansion. Any time we make consideration of new capacity, we, of course, always look at our own assessment of demand for our products. We look at the industry supply and demand trends. We look at pricing. We look at what is the outlook of the future technology nodes in terms of CapEx and the tool sets that are required, and we, of course, consider the timing of future technology nodes and space and tool compatibility. Basically, we study the ROI very carefully. ROI and CapEx, as a percentage of revenue, will continue to be the key driver of any decision related to new capacity additions for SanDisk in the future. We continue to stay focused on disciplined capacity growth for our business. seekingalpha.com